Last year the Centers for Medicare & Medicaid Services (CMS) reined in its mandatory bundled payment models, leaving many healthcare providers concerned that investments they made to prepare for these models might for naught.

But those investments in value-based care models may not go wasted after all under CMS’ new voluntary Bundled Payments for Care Improvement (BPCI) Advanced model.

Participants in the new model will be expected to keep Medicare expenditures within a defined budget, while maintaining or improving performance on these seven specific quality measures:

CMS is changing its formula for calculating and allocating funds for uncompensated care for hospitals that qualify under its Disproportionate Share Hospital program. This new method presents both opportunities and challenges for organizations.

Thanks to the changes, hospitals may be able to identify care currently written off without a determination of financial need. Additionally, the new methodology for calculation of Factor 3 — a hospital-specific factor representing its share of the total uncompensated care provided — may allow hospitals to capture a larger portion of uncompensated care funds.

However, leaders should be aware that CMS is phasing in the use of cost report Worksheet S-10 data, including charity care and unreimbursed bad debt. This year, one-third of Factor 3 will be based on this data, but by fiscal year 2020, use of this data will be fully implemented.

To ensure compliance with reporting data on Worksheet S-10, leaders need to review new guidance from CMS as well as their own organizational policies for charity care determinations, uninsured patient discounts, and bad debt collections. Training for staff involved with submission of the cost report and handling charity care write-off is imperative.

One concern consistently raised about the implementation of pay-for-performance models is that healthcare providers and organizations serving more complex patients would not reap the same rewards as hospitals caring for less sick patients.

New research suggests that those fears may be warranted. A November 2017 study found that Medicare’s Value-based Payment Modifier program inadvertently shifted money away from physicians who treated sicker, poorer patients to pay for bonuses that rewarded practices treating richer, healthier populations.

The study’s lead author Eric Roberts, PhD, of the University of Pittsburgh Graduate School of Public Health, said that if changes aren’t made, value-based payment models will continue to foster this inequity.

“Risk adjustment is usually inadequate in these programs, in part, because it is difficult to measure the differences in complexity of patients across providers. We need to take a careful look at how incentives in these programs are structured and how performance is assessed in order to create the right incentives to improve value and outcomes for the most vulnerable patients,” Roberts said.